The funding is part of the wider £11.5m Building Connections Fund, which was announced by the government in June to tackle loneliness.
This youth specific element to the fund includes £1m from the government and £1m from the Co-op Foundation.
Grants of up to £80,000 are available for projects in areas of deprivation until March 2021 that offer innovative ways of tackling youth loneliness and can share evidence of success UK-wide.
"People can feel lonely at any age, with research showing young people are particularly affected," said Co-op Foundation head Jim Cooke.
"The Youth strand of the Building Connections Fund will help bring young people together to come up with innovative solutions to tackling loneliness while also building their confidence and skills to strengthen their connections and sense of belonging.
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